Reports on internal control over financial reporting report


Question: Reports on Internal Control over Financial Reporting (Report Modifications). For each of the following situations, describe how the auditors' report on internal control over financial reporting would be modified from the standard, unqualified report. Do not write the actual reports.

a. The auditors have identified a material weakness in the processing of sales transactions.

b. Because a relatively short period of time has passed since a control weakness was remediated, the auditors do not believe that sufficient evidence can be obtained with respect to the operating effectiveness of the entity's internal control over financial reporting.

c. Component auditors have audited a significant component of the group financial statements, including internal control over financial reporting relating to that component. They did not find a material weakness in internal control, and the group auditor believes the component auditor's work can be relied on.

d. The auditors believe that the entity's management has not adequately disclosed a material weakness in its internal control over financial reporting.

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Financial Accounting: Reports on internal control over financial reporting report
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